Public Works Project Fraud

Public Works That Generate Illicit Private Gains

Public works—those projects which build, maintain, or repair roads, bridges, schools, and the like for the public good—cost all of us untold billions every year, but the end results are generally worth it. However, as with anything involving large sums of money, fraud can raise its ugly head in a number of ways.

Certain kinds of public works fraud can be prosecutable under the qui tam provisions of the False Claims Act (FCA), and such fraud can encompass more than just money. Cases relating to fraud that also create an ongoing threat to public health or safety, because of the public nature of the projects, are possible.

Threats to Public Safety

One example of this combination of fraud and the endangerment of the public is the qui tam suit brought against Trinity Industries for dangerous guardrails that killed or maimed people rather than protected them. At one point in time, the company changed the manufacturing dimensions of the end caps, which created danger when the guardrails were struck. Because Trinity changed the end caps’ specifications without telling the government, and because they received government money, the action became prosecutable fraud.

Another case that interwove both safety and funds concerned the “Big Dig” in Boston, where part of the I-90 Connector Tunnel collapsed during rush hour in July, 2006, killing a passenger and injuring the driver of the car. Several anchors in the tunnel’s roof slab failed, setting off a chain reaction that dropped 50,000 pounds of concrete onto the road. The case resulted in both civil and criminal liabilities against a joint venture of contractors and consultants; the United States and the Commonwealth of Massachusetts recovered $458 million. An unknown whistleblower was involved in a portion of the case.

Plain Old Greed and Fraud

Of course, it’s not always about public safety. Sometimes, it’s simply pure avarice on the part of the accused. In Chicago during 2014, a construction firm was ordered to pay a $12 million settlement for contract fraud. It was alleged that McHugh Construction diverted funds that were intended for minority-owned and women-owned firms to its own sham companies. The various public works projects occurred between 2004 and 2011. This qui tam case netted the whistleblower slightly more than $2 million.

In January of 2016, a $2.5 million settlement of a qui tam case concerned a Wisconsin contractor and a “Buy American” violation. The company allegedly used Chinese-produced materials while claiming they were made in the U.S. The company also pled guilty to concealing one related material fact, resulting in a $500,000 criminal fine. The whistleblower, a former employee, will receive approximately $412,000.

Areas of Prosecutable Public Works Fraud

Almost any area that involves financial wrongdoing, safety concerns arising from shoddy materials, and contract violations can be grounds for bringing a case under the FCA:

• Bid-rigging and other illegal bidding schemes
• Paying or receiving bribes and kickbacks
• Billing for work not done, or at billing for the work at inflated rates
• Falsifying costs for materials, or billing for nonexistent materials
• Falsifying progress reports and test results
• Falsifying the minority status of a contractor/subcontractor
• Not following the contract’s specifications
• Not paying workers the proper wages
• Using unsuitable or substandard materials
• Using unqualified workers, or using non-union workers when the contract requires union labor
• Violating “Buy American” provisions.

Who can report fraud on public works projects?

Anyone with knowledge can report fraud under the qui tam provisions of the FCA. Examples of potential whistleblowers are safety and structural engineers, foremen or superintendents on the job, quality control inspectors, billing supervisors, those handling purchases, accounts payable or accounts receivable clerks, accountants and financial officers, and business analysts. Any worker with information is urged to step forward and explore whether they have enough information to bring a case.

Hands-on help. Exceptional results.

If you have knowledge concerning fraud against the government such as with a public works project, an experienced whistleblower attorney  like the ones at the Louthian Law Firm can assess your case and help you file the necessary disclosure statement. In some instances, the government will intervene (take part in your lawsuit).

The Louthian Law Firm can help you structure your claim in such a way that the government will be more likely to intervene in your case, possibly increasing the chances that you will recover reward money. Even if the government doesn’t decide to intervene, it might still be advisable to pursue your case without government involvement, with our strong support through every step of the process.

For a free, confidential evaluation of your case, call the Louthian Law Firm today at 803-592-6231 or fill out the online contact form.